Help to Buy hindered by lack of supply
05 March 2015 - 2:11PM
Property
New figures released today by the government reveal
that 88,420 people have bought a home through Help to Buy since the
scheme was introduced in 2013. Help to Buy was created in 2013 to
support hard-working taxpayers who could pay a mortgage, but
couldn’t afford the high deposits demanded by lenders in the wake
of the financial crisis.Together with the government’s Help to Buy:
NewBuy scheme – which offers 95% mortgages for those buying
new-build properties - the number of new home owners has reached
almost ninety thousand.The scheme has also been designed to
stimulate construction of homes. Over half of the homes bought
through Help to Buy have been new-build properties, helping to
contribute to the 37 per cent rise in private house building since
the launch of Help to Buy.94 per cent of Help to Buy completions
have taken place outside of London, emphasising its assistance of
the property market in regions, while 80 per cent of completions
have been made by first-time buyers.The average house price was
£185,000, significantly below the national average. But new
research from Zoopla shows that the average price of property
eligible for Help to Buy has risen 5.5 per cent in the past
year.The analysis of properties for sale in England and Wales up to
a value of £600,000 atributes the climbing price to a lack of
supply. Indeed, the number of properties on the market eligible for
the government’s Help to Buy scheme has fallen 7.4 per cent in the
last year, according to property website, as even the measures
designed to tackle the housing crisis fall subject to its
problems.The biggest fall in properties eligible for Help to Buy in
the past year has been in the East of England, with a 12.3 per cent
reduction in suitable stock on the market, while average prices
have climbed 6.1 per cent over the same period. In London, the
typical value of a property qualifying for Help to Buy has risen by
11.7 per cent since March 2014. Stockport has witnessed the
sharpest decline in properties eligible for Help to Buy, with
available stock dropping 24.3 per cent from a year ago. It is
followed by Rochdale (down 16.9 per cent) and Huddersfield (15.6
per cent).Further south, the number of properties for sale in
Worcester, Cheltenham and Exeter that qualify for Help to Buy
support has increased 5.4 per cent, 3.3 per cent, and 3.2 per cent
respectively over the same period.Of all London boroughs,
Southwark, Lambeth, Waltham Forest and Newham have seen the
greatest annual rise in supply of homes up to £600,000, increasing
by over 15 per cent.Lawrence Hall of Zoopla.co.uk commented: "The
Help to Buy scheme was intended as a leg up for flailing first-time
buyers, but in some areas that footrest has since been pulled from
under their feet. Greater demand hasn’t been met by greater supply
of homes on the market, and instead the soaring price growth of the
past year appears to have airlifted many properties out of the
starter home zone. The pool of homes on the market within
reach of Help to Buy assistance needs to expand, or this pinch on
supply will continue to inflate prices at the bottom rungs of the
ladder."
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